OTTAWA – Various parties continued to question the level to which Rogers Media will use its recently acquired NHL hockey content as a component of its Canadian programming expenditures (CPE) commitments at the company’s licence renewal hearing before the CRTC while Rogers said they need not worry.
The Canadian Media Production Association (CMPA), in its opening remarks on Wednesday fretted that Canadian content will suffer because Rogers will use the NHL to account for its CPE commitments, particularly if the Commission approves Rogers request to be treated under the group licensing framework (GLF).
“We have to wonder if hockey fans will be the only ones to benefit from Rogers’ new group status. Yesterday’s panel discussion did not provide us any comfort with respect to that question,” said Michael Hennessy, president and CEO of the CMPA. “What we are concerned about, though, is that, under the GLF, Rogers will now have the motivation as well as the opportunity to allocate both its revenue and its costs in a manner that will help its new hockey broadcasting business at the expense of its support for other genres of Canadian programming,” he added.
Bell Media also questioned Rogers’ ability to divert spending away from local programming and independent productions to hockey, but the company also wondered about the impact of the CBC/Radio-Canada agreement on the broadcasting system.
Alain Strati, assistant general counsel at Bell Media (and a former Rogers Media executive), suggested on Tuesday that the deal appeared to be a “brokered time” agreement and that the $100 million CBC reportedly earned from Hockey Night in Canada seems to disappear from the system. While it has been explained how CBC earned revenue from sub-licensing deals with other broadcasters for the Sochi Olympics, the new deal between Rogers Media and CBC isn’t clear.
“What wasn’t discussed was where the revenue Rogers earns from selling advertising on CBC would be accounted for and whether it would be subject to CPE.” Alain Strati, Bell Media
“What wasn’t discussed was where the revenue Rogers earns from selling advertising on CBC would be accounted for and whether it would be subject to CPE. It appears from their projections that it would not. The implications of this for the broadcasting system are significant,” Strati said.
In its replies, Rogers Media addressed several concerned raised by interveners and commissioners. First on the use of hockey content for CPE, the company committed to use none. “We are prepared to make it a condition of licence that we will not use any NHL hockey or in fact any professional sports, either live games or pre- and post-shows to go towards our local exhibition on City,” said Rogers Media president Keith Pelley.
The company also responded to concerns about the CBC deal by noting that the agreement is no different than those currently in place for the Calgary Flames and Edmonton Oilers. Rather than licensing CBC rights to hockey for a fee, which Pelley noted would still likely result in a loss of revenue for the public broadcaster, Rogers Media retains “the inventory.” The only difference with the deal is the scale with Pelley adding this should “not be the factor of determining a change in industry practice.”
Earlier in the day, Telus and the Canadian Cable Systems Alliance raised concerns about increasing wholesale rates and costs to consumers as a result of Rogers Media’s significant spending to acquire the hockey rights.
The company did nothing to address those concerns in its replies. “We expect good faith negotiations with BDUs on renewals for Sportsnet as agreements expire that reasonably reflect the enhanced value of these services now that they offer additional content, including NHL,” said Pelley.
Content exclusivity on digital platforms was brought up by Telus during its appearance. The company expressed its worry that distributors would be shut out of non-linear content. Ann Mainville-Neeson, VP of broadcasting policy and regulatory affairs at Telus, said comments from Pelley at the time of the NHL rights acquisition announcement indicate this to be a big part of the company’s hockey strategy going forward. “In the sports genre, it is easy to see how ancillary programming, a.k.a. non-TV programming, could be highly sought after by fans,” she said, adding “especially if promoted on all of Rogers’ TV programming services, thereby removing the discovery barrier for this made for digital media content.”
Under questioning, Mainville-Neeson added that Telus would like to see ancillary content made available to all carriers as content for linear TV now must be.
“The Rogers licence renewal applications gives the Commission an opportunity to give real force to its VI policy at a time when it actually matters – before the deal is concluded and the damage is done.” – Chris Edwards, CCSA
The CCSA also argued that the commission should impose the vertical integration (VI) rules as a condition of renewing Rogers‘ licences. This, says the association, will ensure that small cable operators aren’t subject to potential anti-competitive behaviour by the company. “The Rogers licence renewal applications gives the Commission an opportunity to give real force to its VI policy at a time when it actually matters – before the deal is concluded and the damage is done,” said Chris Edwards, VP of regulatory at the CCSA.
During the hearing, there was considerable opposition to Rogers Media’s proposed changes to its ethnic OMNI channels. The company did come off its original proposals and agreed to increase the amount of programming for ethnic groups and distinct languages from 10 to 15. As well, it will harmonize its 8 p.m. to 10 p.m. schedule across all OMNI stations and commit to 75% of ethnic programming and the remaining being in English. On OMNI’s Cancon levels, Rogers Media is still committed to reducing it from 60% to 40%.
